Icahn Wants This Yahoo Out

Yahoo's board met yesterday and set August 1 as the date of its annual shareholders meeting during which ia showdown with the billionaire activist investor Carl Icahn is expected. Yahoo is discussing possible partnerships with Microsoft, which previously withdrew its offer to buy Yahoo. Yahoo also is in talks with Google to possibly work out an outsourcing deal.

Icahn accused Yang and Yahoo’s board of being insincere about their readiness to accept an acquisition offer and setting up a costly employee-retention plan that would deter any deal outright.

"I am amazed at the lengths that Jerry Yang and the board went to entrench themselves in this situation," Icahn told The Wall Street Journal. Yahoo has denied that it has considered anything but the shareholders’ best interests.

A lawsuit filed by Yahoo shareholders unsealed in a Delaware court this week brings clarification concerning the negotiations with Microsoft. The suit refers to the refusal of Microsoft’s $40-a-share offer in January 2007. At that time, Yahoo’s shares were trading between $26 and $29 each while the company was led by then-CEO Terry Semel. A Yahoo spokesman told the WSJ on Tuesday that the company was “not aware” of a $40-a-share offer.

Icahn has estimated that Yahoo’s retention plan would have cost Microsoft $2.5 billion more, which would in turn, discourage any deals. "It's no longer a mystery to me why Microsoft's offer isn't around," he said. "How can Yahoo keep saying they're willing to negotiate and sell the company on the one hand, while at the same time they're completely sabotaging the process without telling anyone?"

Icahn insists that Microsoft will not be able to place a new bid as long as Yang is CEO.